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A Dramatic Drop of Revenue for Hotels in Munich in April 2017

April 2017 data provided by STR has brought some negative news for hotels in Munich, Germany. They experienced a truly dramatic decline in revenue per available room (RevPAR) of 46.5%.

The declines can be seen in all main metrics. While the hotel supply was growing and added 1.6% in April 2017, the demand lost as much as 11.8%. The decrease of occupancy estimated 13.2% to the level of 71.8%. The average daily rate also had a drastic slump of 38.4% to 109.9 euro (US$119.56). Naturally, the decrease of all these crucial factors couldn’t have failed to affect RevPAR, and so Munich hotels posted a decline of 46.5% to 78.9 euro (US$85.83).

There is a reason for such a drop. In April 2017, Munich didn’t host the triennial Bauma trade fair. Last year, the event that took place on April 11-17 attracted nearly 580,000 visitors to Munich. Therefore, in April 2016 the occupancy skyrocketed to 83.3% and the average daily rate reached a record level of 168.15 euro. As last month the city didn’t host any prominent events, it was absolutely impossible to match the 2016 results. At the same time, April 2017 absolute occupancy and ADR were in line with historic averages for the month if not taking into consideration the last year. Therefore, the overall state of the market is not bad and such a result is not a sign of recession.